Impact of Cloud Computing Announcements on Firm Valuation

Authors

Srikanth Parameswaran, State University of New York at BuffaloFollow
Srikanth Venkatesan, State University of New York at BuffaloFollow
Manish Gupta, State University of New York at BuffaloFollow
Raj Sharman, State University of New York at BuffaloFollow
H. Raghav Rao, State University of New York at BuffaloFollow

Track

Economics and Value of Information Systems

Abstract

With increasing demand for Cloud Computing services, a growing number of firms are citing business agility and costsavings as motivators for adopting Cloud Computing services. Extant literature does not provide any empirical evidence ofvalue of announcements made regarding the Cloud Computing environment. This paper examines impact of CloudComputing announcements on firm valuation, using event study methodology. This study explores the market impact ofadoption of Cloud Computing on the cloud vendors/providers and customers/adopters. The impact on firm value of thecompetitors, of the companies adopting Cloud Computing services, is also analyzed. The study shows that there is asignificant impact of those announcements on the firm value of the companies. However, it shows a contrasting impact on thecustomers, vendors and their respective competitors, when analyzed separately.

Recommended Citation

Parameswaran, Srikanth; Venkatesan, Srikanth; Gupta, Manish; Sharman, Raj; and Rao, H. Raghav, "Impact of Cloud Computing Announcements on Firm Valuation" (2011). AMCIS 2011 Proceedings - All Submissions. 291.
https://aisel.aisnet.org/amcis2011_submissions/291